Spanish opposition outlines economic plan

30th January 2011, 0 comments

Spain's opposition Popular Party will slash corporate taxes and privatise the majority of public companies if it wins a general election set for next year, its leader Mariano Rajoy said Sunday as he outlined his economic plan.

"In two years we can fix the economy," he said in a lengthy interview published in centre-right daily newspaper El Mundo.

Spain's unemployment rate has soared to 20.33 percent, the highest in the industrialised world, since the global financial meltdown compounded the collapse of a labour-intensive construction boom in 2008.

The country is also fighting to bring its massive public deficit under control and to convince nervous investors that it is not in need of a bailout like the ones granted Ireland and Greece last year.

Rajoy, whose party enjoys a wide lead over the ruling Socialists in opinion polls, said if elected he would reduce the corporate tax rate charged to small and medium sized business by five percentage points to revive the economy.

"My priority when it comes to fiscal matters is to help all those who create jobs," he said.

To reduce the public deficit he said his party would "privatise or close the majority" of the nearly 4,000 public companies and bodies that exist in Spain and would set a limit on spending on the part of the nation's powerful regional governments.

Among the other measures included in his party's economic plan is a reduction in the sales tax applied to the "key" tourist sector to 4.0 percent from 8.0 percent and the extension of the life of the country's nuclear plants.

The Popular Party's economic plan also calls for greater harmonisation of environmental and other such regulations within Spain and for the reintroduction of a tax rebate on mortgage payments.

The Spanish economy, the European Union's fifth biggest, emerged from recession with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second but then stalled with zero growth in the third.

Prime Minister Jose Luis Rodriguez Zaptero's government has introduced a series of reforms, including changes to the nation's labour laws that make it easier to fire workers, in order to boost economic growth.

But Zaptero has warned it could take five years for the reforms to bring the unemployment rate back down to the levels it was at before the collapse of the property market.